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Questions and Answers - April 16


QUESTIONS TO MINISTERS

Prime Minister—Statements

1. DAVID SHEARER (Leader of the Opposition) to the Prime Minister: Does he stand by all his statements?

Rt Hon JOHN KEY (Prime Minister): Yes.

David Shearer: Why did the Prime Minister state six times in his press conference on 24 September that he did not know of any other unlawful action or errors made in relation to legally questionable spying on New Zealanders, when in fact he had been informed about that in July earlier?

Rt Hon JOHN KEY: It was because I believed that to be correct.

David Shearer: Why did he ask only to be informed at that time, when he said today on Radio New Zealand that when the illegal spying was flagged by the Government Communications Security Bureau director in July, he indicated to him how serious the situation was?

Rt Hon JOHN KEY: It was because I believed that to be the prudent course of action.

David Shearer: Why did he not instruct the Government Communications Security Bureau to suspend all legally questionable spying on New Zealanders as soon as he became aware of the serious problem in July?

Rt Hon JOHN KEY: The very unresolved nature of the matter, I believe, did not warrant that action.

David Shearer: Given that it was unresolved, did he not think that it was a more prudent course of action to stop any illegal spying on New Zealanders?

Rt Hon JOHN KEY: Not at that time, because that was not established and it has not been established, actually, at this point.

Louise Upston: Can the Prime Minister outline to the House the increasing threat that the National Cyber Security Centre has reported on?

Rt Hon JOHN KEY: Actually, I can—I can. The National Cyber Security Centre reported in 2011 that it had 90 instances lodged with it. These constitute serious instances that do damage or compromise the target or company involved. In 2012, that number increased from 90 to 134. I can inform the House today that for this calendar year the number already stands at 79, and we are not even at Anzac Day. We have already passed half of last year’s total of serious cyber instances. These attacks are steeply rising and putting at risk our Government and private sectors’ security. The Government Communications Security Bureau has a vital role to play in combating this and that is why it is crucial the legislation that I proposed yesterday is passed by this House in good time.

David Shearer: Why did he stop illegal spying in September when he did not feel it was possible to stop it in July? What happened in between?

Rt Hon JOHN KEY: I think it is technically correct to say that I did not stop it in September. Actually, the director-general did, and he advised me.

Louise Upston: What steps has the National-led Government taken to strengthen New Zealand’s response to an increasing cyberthreat?

Rt Hon JOHN KEY: This Government has taken a number of steps in relation to an increasing cyberthreat, including creating the National Cyber Security Centre within the Government Communications Security Bureau. The centre has publicly reported on the number of serious cyberthreat instances, and it plays an important role in interacting with industry, across Government, and internationally, to protect our infrastructure and systems. We have also created the National Cyber Policy Office within the Department of the Prime Minister and Cabinet, which leads the development of cybersecurity policy advice for Government. It also provides advice on investing Government resources in cybersecurity activities. We are taking the cyberthreat very seriously, as are other Governments around the world. The reporting of instances here is still relatively new, so it is highly likely there is a lot more to come in this area.

David Shearer: Why has the amendment to the Security Intelligence Service legislation suddenly been shelved, and will he make public the draft legislation so that we can see what changes have been planned for the Security Intelligence Service?

Rt Hon JOHN KEY: In answer to the last part of the question, no.

Louise Upston: Can the Prime Minister outline for the House the legislative proposals for significantly strengthening the oversight of our intelligence services?

Rt Hon JOHN KEY: Yes. The Government is proposing to significantly strengthen the oversight of our intelligence agencies and this is a very important step in rebuilding public confidence following the Kitteridge report. Among the changes we intend to make are the following: removing the requirement that the Inspector-General of Intelligence and Security be a retired High Court judge. This will increase the pool of people who can do the job. Second, we will make the inspector-general’s office more proactive by increasing the requirements on the office and moving it a step forward from the existing review-focused work. Third, we will increase the resourcing and staffing of the inspector-general’s office, including creating a new role of deputy inspector-general. Fourth, legislation will explicitly expand the inspector-general’s programme and the office’s work will become more transparent. There are more changes, but in the interests of time I will stop here with what are very important and significant proposals for change.

David Shearer: In relation to the unanswered part of my last question, why has the amendment to the Security Intelligence Service legislation been shelved?

Rt Hon JOHN KEY: Because, in my view, the primary focus of attention should be on the changes to the Government Communications Security Bureau law and the increase in oversight.

David Shearer: In light of his answer and the lack of confidence that people have in the intelligence agencies, why will the Prime Minister not agree to a full independent inquiry to restore that confidence in our intelligence agencies?

Rt Hon JOHN KEY: Because I do not believe it is necessary.

State-owned Assets, Sales—Progress

2. TODD McCLAY (National—Rotorua) to the Minister of Finance: What progress is the Government making in its share offer programme to reduce debt and free up capital for priority spending?

Hon BILL ENGLISH (Minister of Finance): Yesterday the Mighty River Power share offer opened to New Zealand investors. This is the first offer in the Government’s $5 billion to $7 billion programme. The Mighty River Power offer period is for New Zealand retail investors only. This ensures New Zealanders will be at the front of the queue for shares and encourages widespread ownership so that 85 to 90 percent of Mighty River Power shares are owned by New Zealanders.

New Zealanders have until 3 May to apply to buy shares. Shares are expected to be listed on the NZX on 10 May.

Todd McClay: How many New Zealanders pre-registered for shares in Mighty River Power?

Hon BILL ENGLISH: There were 440,000 New Zealanders who pre-registered for shares in Mighty River Power. Those who pre-registered may get an allocation preference of up to 25 percent if the offer is oversubscribed. We have yet to see just how many of those who have pre-registered will actually apply for shares. New Zealanders with applications for up to $2,000 worth of shares are guaranteed not to be scaled back, and New Zealanders who hold their shares continuously for 2 years will receive a loyalty bonus.

Hon David Parker: Why did thousands of pre-registrants for the Mighty River Power share offer receive emails last night with their names and reference numbers blacked out? Is it because the Government’s track record on privacy is so bad that it has swung too far the other way?

Hon BILL ENGLISH: I understand that the provider of the email service detected some kind of error in the system after the emails had gone out. That has been corrected. But I can assure the member that that will not dampen the enthusiasm of those 440,000 New Zealanders who have shown an interest in Mighty River Power shares. They are making serious decisions about their personal investments, and that does not suit the Labour Party, which wants them to—

Mr SPEAKER: Order!

Todd McClay: What are the benefits of the mixed ownership programme?

Hon BILL ENGLISH: There is a range of benefits. In fact, the benefits are significant enough that the Opposition parties have not promised to buy these companies back. These companies will be subject to the disciplines of financial markets, where they are likely, on average, to perform better than under public ownership. Funds raised from this partial sale will be reinvested through the Future Investment Fund. These investments will be in infrastructure, hospitals, schools, and the rebuild of Christchurch as part of a $19 billion capital expenditure programme by the Government over the next 4 years. We expect that the sale of shares will raise $5 billion to $7 billion, or around 3 percent of the Government’s balance sheet value. The alternative is to borrow more on volatile world financial markets.

Todd McClay: As part of the Government’s wider programme to improve the electricity sector, what progress has been made in making the market more competitive for hard-working New Zealanders?

Hon BILL ENGLISH: When the National Government came to office in late 2008, we considered it was urgent to do something about the runaway electricity price increases under the previous Government, which had added up to a 72 percent increase, or around 8 percent compound increases, in the electricity prices under the Labour Government. So we commissioned a technical advisory group to review the market, and, as a result, the Government passed the Electricity Industry Act to re-allocate assets among the State-owned enterprises to increase competition in wholesale and retail markets, created the Electricity Authority and made it responsible for promoting competition—a change from the Electricity Commission—developed a liquid hedge market, and created the What’s My Number campaign to promote consumer switching. All of these actions have had some impact on the runaway 8 percent per year price increases under the previous Labour Government.

Prime Minister—Compliance with Cabinet Manual

3. Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: Does he believe that he has met the requirements of the Cabinet Manual to behave in a way that upholds, and is seen to uphold, the highest ethical standards in his ministerial capacity, his political capacity and his personal capacity; if so, why?

Rt Hon JOHN KEY (Prime Minister): Yes, because I have.

Rt Hon Winston Peters: How was he upholding the Cabinet Manual on 24 September last year regarding the Government Communications Security Bureau when he said “I’ve never had advice in the four years that I’ve been minister that they’ve in any way ever acted unlawfully …”, despite saying last week that he was told about illegal spying in July 2012?

Rt Hon JOHN KEY: Because the statement I made on 24 September was correct.

Rt Hon Winston Peters: Was the Prime Minister told in July of 2012 that there had been illegal spying—yes or no?

Rt Hon JOHN KEY: Not the way the member defines it, no.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. My language has been plain and simple and to the point. There is no way one can misconstrue the first and the last question. How can he possibly get up and get away with saying “Not the way the member defines it.”? How else could I define it? I am asking him whether he was told in July 2012 of illegal spying. How do you define that? It is as plain as daylight.

Mr SPEAKER: And the Prime Minister, in my mind, addressed that question quite emphatically, saying “No, not in the way the member is defining it.”

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. Could I have your ruling? How would you define the question I just asked?

Mr SPEAKER: No. That is not a point of order now. You are now disputing—what the member can do is continue with his supplementary questions.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. We have limited supplementary questions in this House. That is not a satisfactory ruling—that we can count on supplementary questions when you know that that number is limited.

Mr SPEAKER: On this occasion I will allocate an additional supplementary question to the member.

Rt Hon Winston Peters: What is the difficulty with the question “Was he was told about illegal spying in July 2012?” that he cannot answer?

Rt Hon JOHN KEY: I have answered it. As I have made clear publicly, what was raised in July was a flag about the issues of the operability between the SIS and the Government Communications Security Bureau legislation. I was advised that there was legal work that had to be done and was ongoing, but it was unresolved. In fact, actually, in terms of legal opinions, it is still not resolved today. But there was a decision reached by the Solicitor-General in March 2013.

Rt Hon Winston Peters: Given that it took him a full week to disclose a phone call he made to Ian Fletcher about the Government Communications Security Bureau job, given that he knew Mr Fletcher’s phone number, despite not having seen him for many, many years, and given that he had dinner with Mr Fletcher on at least two occasions—

John Hayes: Conspiracy.

Rt Hon Winston Peters: Well, actually, a conspiracy is when two or more—

Mr SPEAKER: Order! [Interruption] Order! If the member could just concentrate on his question now, please.

Rt Hon Winston Peters: Well, Mr Speaker, all I am hearing is a barrage over here.

Mr SPEAKER: I accept that interjections are not helpful. Would the member please continue.

Rt Hon Winston Peters: Given that it took him—[Interruption] Oh, you sensitive chaps.

Mr SPEAKER: Order!

Rt Hon Winston Peters: Given that it took him a full week to disclose the phone call he made to Ian Fletcher about the Government Communications Security Bureau, given that he knew Mr Fletcher’s number, despite not having seen him for years, and given that he had dinner with Mr Fletcher on at least two occasions, did he make more than one phone call to Mr Fletcher prior to his appointment to the Government Communications Security Bureau?

Rt Hon JOHN KEY: I did not have dinner with Ian Fletcher on two occasions.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. My question—[Interruption]

Mr SPEAKER: Order! This is a point of order.

Rt Hon Winston Peters: My question asked whether he made more than one phone call to Mr Fletcher—

Mr SPEAKER: Order! The difficulty was that there was quite a lot else added to the question, but if the Prime Minister could please address the last part of the question, which was whether he made more than one phone call, that would help the order of the House.

Rt Hon JOHN KEY: I do not have that information with me. If the member wants to put it down in writing, I am happy to get it for him.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. With respect, what is the use of question time when the Prime Minister can give that sort of answer? He was asked whether he made more than one phone call prior to the appointment, and he cannot remember.

Mr SPEAKER: The Prime Minister answered that he did not have that information with him. That is a perfectly satisfactory answer to that question. Does the member wish to ask his additional supplementary question?

Rt Hon Winston Peters: How was he upholding the Cabinet Manual when he told the House that the first he knew of the Government Communications Security Bureau spying on Kim Dotcom was 17 September 2012, when in fact he had been told on 29 February 2012 and made a quip to staff about it?

Rt Hon JOHN KEY: I refute the premise that the member is basing that question on.

Rt Hon Winston Peters: Supplementary question, Mr Speaker.

Mr SPEAKER: No. Order! The member has now used not only his entitlement but also the additional supplementary question.

Rt Hon Winston Peters: No, I have got five.

Mr SPEAKER: No, he has four today and I have given you one extra. That comes to five, and you have used five supplementary questions. Question No. 4, the Hon Phil Heatley.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. By my calculation—and your clerk can tell me whether it is right or wrong—having given me one extra, and I had only four written down here, that makes five. I have not got to ask the fourth one yet.

Mr SPEAKER: My clerk is on the phone. He has said you had had four questions, I gave you another one, which came to five, and you have asked five in total. [Interruption] He has asked five questions. We are moving on to question No. 4.

Beneficiaries—Statistics

4. Hon PHIL HEATLEY (National—Whangarei) to the Minister for Social Development: What reports has she received on the latest benefit figures?

Hon PAULA BENNETT (Minister for Social Development): The latest benefit numbers show that there are around 29,000 fewer New Zealanders receiving benefits than in the last quarter. This is the lowest that benefit numbers have been at this time of the year since 2009. As at the end of the March quarter there were 310,146 people on benefits, including 92,550 sole parents on the DPB, just over 58,000 on sickness benefits, and 48,756 on unemployment benefits.

Hon Phil Heatley: How many people have come off benefits for work, and what difference will this make?

Hon PAULA BENNETT: In the last quarter more than 17,600 people went off work-tested benefits—the unemployment benefit, the DPB, and sickness benefits—and got into work. What we also saw, as is usual in the month of March, was a lot going back into training and into study. But we know that getting people off welfare and into work means greater opportunities for them. This is making a difference to New Zealanders’ lives.

Hon Phil Heatley: What trends has she seen in the number of people receiving sickness and invalids’ benefits?

Hon PAULA BENNETT: From December 1999 to November 2008 the sickness benefit numbers grew by 50 percent and numbers for the invalid’s benefit grew by 60 percent. When I first came in as Minister, I was told that this was the track these benefits were on and to just accept it. Quite frankly, this National Government was not prepared to. Despite the toughest global economic recession, the growth of sickness benefit numbers has been just 14 percent and has been tracking down over the last 12 months. Growth in the number of invalid’s benefits has, actually, stayed the same and has not increased.

Exchange Rate—Effect on Export and Import Substitution Jobs

5. Hon DAVID PARKER (Labour) to the Minister of Finance: Will the recent rise in the New Zealand dollar to a post-float high on the Trade Weighted Index cause job losses among nonprimary exporters and import substitution businesses?

Hon BILL ENGLISH (Minister of Finance): It is too simplistic to conclude that, although of course it is possible. Jobs come and go for all sorts of reasons including winning or losing customers, the success or failure of competitors, and changes in market prices, which can, of course, be influenced by the exchange rate. A high exchange rate does make it more difficult for exporters to be profitable, but it is clear that over the past 6 years or 7 years, despite a rising and high exchange rate, many New Zealand exporters have remained or became profitable, and are growing. This is demonstrated in, for instance, the Performance of Manufacturing Index for the manufacturing sector, which has shown that since 2009 most of the time the manufacturing sector has been growing. More recent statistics suggest that our firms are fairly resilient. New job listings on seek.co.nz are up 4.9 percent compared with March last year, and TradeMe reports job vacancies in the first quarter were up 5 percent on a year ago.

Hon David Parker: Does he agree with the IMF and the Governor of the Reserve Bank that the New Zealand dollar is overvalued and hindering the rebalancing of the New Zealand economy; if so, what measures will he take to reduce the level and volatility of the New Zealand dollar?

Hon BILL ENGLISH: Yes, I do tend to agree with the Reserve Bank and the IMF on this matter, and I also agree with both of them that there is no easy or obvious fix to a relatively high exchange rate. That high exchange rate is driven by the relative health of the New Zealand economy compared with other developed economies. I would expect the exchange rate is likely to come down when other economies stop printing money and their interest rates start rising. In the meantime, we are focusing on what we can control, which is the competitiveness of the New Zealand economy, and our 300 initiatives in that respect are set out in the Business Growth Agenda.

Hon David Parker: Given that exports have barely moved as a percentage of GDP in the period since he was appointed, how will his goal of exports at 40 percent of GDP be achieved under what he himself has called the highest rolling average exchange rate since World War II?

Hon BILL ENGLISH: Well, under the circumstances, we actually have not done too badly. I agree that the high exchange rate is a headwind to a rebalancing of the economy. The other significant headwind is going to be the rebuild of Christchurch, where very substantial resources that may have been invested in the externally focused sectors are going to be invested in rebuilding Christchurch, but that is something that we have to do. In the long run, our focus on getting the Government’s books under control, improving the efficiency of the 30 percent of the economy the Government controls, and focussing that on the competitiveness of our businesses, compared with offshore, including Australia, is going to lead to an improvement in our export performance.

Paul Goldsmith: What reports has he received showing that businesses are becoming more confident and investing for growth, despite the headwinds caused by the high New Zealand dollar?

Hon BILL ENGLISH: There are a number of such reports that show the resilience of New Zealand businesses, which recognise that an increase in the exchange rate is effectively an increase in the living standards of most New Zealanders. Those reports include the New Zealand Institute of Economic Research’s quarterly survey of business opinion, which shows business optimism at the

highest level since March 2010; the latest monthly economic indicators show that the outlook for the economy is looking more positive; and the BNZ - Business New Zealand performance of manufacturing index remained positive in March and just off a 12-month high. Of course, if the exchange rate remained elevated levels of 86c or 87c against the US dollar, that would be a very significant challenge for New Zealand businesses.

Hon David Parker: Given that just last week he said that the two biggest hindrances to export growth are the Canterbury earthquakes and the exchange rate, should he not abandon the primacy given to inflation targeting over other aspects, like the exchange rate, and do something to address the exchange rate in order to increase exports?

Hon BILL ENGLISH: Well, I would certainly stand by those comments. If the member means are we going to go printing money, the answer is no, because in the long run that will drive down the living standards of all New Zealanders. Bear in mind, a rising exchange rate means that New Zealanders can buy more with their Kiwi dollar than ever, including petrol and including food. I do not know what the Labour Party has got against rising living standards for New Zealanders.

Hon David Parker: Why is he steadfastly sticking to a monetary policy regime that was devised before the fall of the Berlin Wall when so many other countries have moved on and are driving the New Zealand dollar to heights that close down New Zealand businesses and jobs?

Hon BILL ENGLISH: The Labour Party needs to make sure it is not led by the nose by the Greens—as it is on its electricity policies, as we will find out on Thursday—on this matter of the exchange rate. The member is fooling himself if he believes that there is some easy way of a small, open economy picking its exchange rate. You just cannot do it in a way that maintains a sensible economy without massive risk to taxpayers. The member has flown around the world talking to all sorts of experts, but actually conventional monetary policy is the most appropriate for the New Zealand economy as it is, and with growth between 2 to 3 percent we are in much better shape than a whole lot of other economies.

Public Transport, Auckland—City Rail Link

6. JULIE ANNE GENTER (Green) to the Minister of Finance: Does he have a plan to fund the Auckland City rail link in the upcoming Budget given that public backing for the rail project is more than twice as strong as the Government’s proposed new motorway north from Puhoi?

Hon BILL ENGLISH (Minister of Finance): I am advised that the Pūhoi to Wellsford road has considerable backing, particularly in Northland and the North Auckland region. I am further advised that the road has a cost-benefit ratio that is higher than the rail loop, both with and without consideration of wider economic benefits. Discussions with the Auckland Council on transport options are continuing. Of course, the Government must be satisfied that any investment represents value for taxpayers’ money, and, as for financing plans, the member will just have to wait for the Budget on 16 May.

Julie Anne Genter: I seek leave to table the business cases for the Auckland City rail link and for Pūhoi to Wellsford, which show that—

Mr SPEAKER: Order! Are they publicly available or easily available to members? [Interruption] They are.

Julie Anne Genter: If his goal is to achieve value for money for the taxpayer, why is he prioritising $2 billion on duplicating a motorway that carries fewer than 20,000 vehicles per day instead of unlocking Auckland’s rail network with the city rail link, which will take tens of thousands of cars off the road at peak time?

Hon BILL ENGLISH: These decisions are all made in the context of the documents the Government publishes about its plan for roading over the next 4 or 5 years, so the member is free to go and look at how that is explained and put together. In respect of these particular projects, the Pūhoi to Wellsford project has a reasonable cost-benefit ratio. One would also take into consideration an issue commonly raised by Opposition parties, and that is the economic deprivation

of the far north. It has a strong view that better infrastructure will, in the long run, help economic development and therefore provide jobs for people in the far north. In respect of the rail loop, there is ongoing discussion with the Auckland Council, which has put its case consistently over a number of years. On the face of it, the benefit-cost ratio for that project is lower than for the Pūhoi to Wellsford highway.

Julie Anne Genter: Would it not be smarter to invest in targeted safety upgrades to the road north of Pūhoi now and a bypass around Warkworth, which would achieve 90 percent of the safety and economic benefits much sooner than a new duplicate motorway, leaving $1.5 billion to invest in a project that will make a real difference to hundreds of thousands of Aucklanders and how they get around their city every day?

Hon BILL ENGLISH: I accept that the member is an advocate for the central business district rail loop, but even if there is a decision made that it is a worthwhile project, there would then be a discussion about who should pay for it, because, as the member has pointed out, it is something that primarily benefits the Auckland commuters. I would also point out to the member that it is not a trade-off between the Pūhoi highway and the central business district rail loop. The Government has a broad-ranging investment programme in transport, which has included very significant investment in the Auckland and the Wellington rail networks. In fact, it is very significant, picking up from where the previous Government started off. There has been very considerable progress made with those investments, and the Government will also weigh up any decision around the rail loop with all the other transport projects all around the country, many of which have better benefit-cost ratios than this one.

Julie Anne Genter: Does he deny that the roads of national significance have not been tested by Treasury’s better business case guidelines and, therefore, his Government is prioritising 85 percent of new infrastructure spending on projects that have not been thoroughly assessed and that were chosen before this party came into Government?

Hon BILL ENGLISH: Some of the weight given to the roads of national significance was set out in the manifesto presented by the National Party Opposition back in 2008, and of course at that time it did not have access to all the analytical capacity—or, in fact, to any of the analytical capacity—of the Public Service. But those projects have all been thoroughly scrutinised for value for money, and any new projects that the Government invests in, whether it is roads, hospitals, schools, or rail, go through a very thorough process to test them for value for money.

Julie Anne Genter: Can I confirm that the Minister has just said that he is prioritising projects that have not been through Treasury’s better business case guidelines for infrastructure development, instead of prioritising projects that would actually make a real difference to congestion in Auckland, the single biggest project of which is the city rail link?

Hon BILL ENGLISH: Well, I think that the point here is that the reason there is a healthy debate about the city rail link is that when you put it through the kinds of robust guidelines that have been developed, it shows relatively low benefits for the investment. That is not to say that it cannot happen, but I do not think we should try to fudge the figures around the general benefits of the central business district rail link, and if the member has reasons why it should go ahead other than its economic value to New Zealand, then I am sure that those are going to be part of the debate. But the fact is that under rigorous assessment, it is not the kind of project that stands out ahead of all the others as a valuable investment.

Julie Anne Genter: Given that road users and freight will benefit most from the city rail link according to all the numerous studies that have been done on this project, because it is the best option to reduce congestion, why will his Government not make it a priority, instead of its election promises to the provinces?

Hon BILL ENGLISH: Actually, we spend a fair bit of time in the provinces defending the fact that a lot of the investment is in the big cities, particularly the Tauranga-Hamilton-Auckland triangle. All those matters, of course, will be taken into account as this debate continues to evolve. I

know that in the mind of the Auckland Council this is a project that it believes is vital to the development of its city. The rigorous economic assessment of it does not rank it highly, but the discussions are continuing.

Julie Anne Genter: Given that Auckland is expected to grow by more than the entire population of Wellington by 2031, why is his Government not prioritising smart infrastructure like this city rail link, which will unlock the capacity of our existing rail asset and take tens of thousands of cars off the road at peak time, giving Aucklanders real choices and freeing up the roads for freight and commercial traffic?

Hon BILL ENGLISH: Well, our Government is aware of what the likely growth pressures in Auckland are, which is why there has been very extensive investment. The one under way now— the Waterview tunnel—is, I am advised, the largest roading project in the southern hemisphere at the moment, and that is all about unlocking the potential of the completed motorway network, because regardless of whether the central business district rail tunnel goes ahead, the overwhelming majority of commuter trips in Auckland will continue to be in either cars or buses, and they will continue to need motorways. So these are not mutually exclusive ways of approaching investment in Auckland’s infrastructure. The Government has done metro rail, it is proceeding to complete the motorway network, and it is in an ongoing discussion with the council about the central business district rail network.

Julie Anne Genter: For the benefit of the Minister, I seek leave to table information from traffic engineering guidelines that shows that the capacity of a motorway lane is 2,000 people per hour—

Mr SPEAKER: Order! Is the information freely available to members?

Julie Anne Genter: It does not seem to be available to the National Government—

Mr SPEAKER: If it is freely available to members it will not be tabled.

Julie Anne Genter: I also seek leave to table a letter I have here that is not available on the internet, but it is a letter to the Secretary of State for Transport in the United Kingdom from 25 transport professors, and it does question the economic benefits of—

Mr SPEAKER: Order! Leave is sought to table this letter, a UK letter, signed by 25 professors, etc. Is there any objection? There appears to be none. It can be tabled. Document, by leave, laid on the Table of the House.

Economic Relationship, New Zealand - China—Development

7. Dr JIAN YANG (National) to the Minister for Economic Development: How is the Government recognising the importance of China for New Zealand’s trade, education and tourism sectors?

Hon STEVEN JOYCE (Minister for Economic Development): Last week the Prime Minister led the largest-ever New Zealand business delegation to China. New Zealand’s economic prosperity is highly dependent on our ability to form and maintain strong links with other countries. This trip was particularly important for encouraging and facilitating more growth in our trade, tourism, and international education exports with China. Total two-way goods trade with China now totals $14.6 billion, and greater investment developing between our two economies means we are broadly on track to meet the target that the Prime Minister and Premier Wen set in 2010 of doubling the twoway trade to NZ$20 billion by the end of 2015. This target was reconfirmed between the Prime Minister and President Xi Jinping during the successful China visit last week.

Dr Jian Yang: What progress was made on furthering New Zealand - China education partnerships during the trip to China?

Hon STEVEN JOYCE: Around 24,000 Chinese students come to New Zealand schools and tertiary institutions every year, making China our largest source of international students. While in Beijing last week I signed a strategic education partnership with China’s education Minister, which will build on the existing positive relationship between the two countries through supporting more

educational institutional partnerships. As part of that partnership I witnessed the vocational training programme arrangement between Wintec and Qingdao Technical College and Tianjin Light Industry Vocational and Technical College. I also witnessed the Waikato University and Sun Yat- Sen University memorandum of understanding, the New Zealand Little Schools and Wuxi local government memorandum of understanding, the launch of a Gibson Group documentary on Chinese student experiences in New Zealand, and I had the pleasure of launching the first Chinese language version of the New Zealand children’s classic Hairy Maclary from Donaldson’s Dairy.

Dr Jian Yang: What announcements were made during the trip to China to make it easier for Chinese tourists and business people to visit New Zealand?

Hon STEVEN JOYCE: China is now New Zealand’s second-largest source of visitors, and we are committed to ensuring they enjoy a top-quality tourism experience. The number of Chinese tourists to New Zealand is growing rapidly—for the first time exceeding 200,000, in the year to February 2013. That is up nearly 40 percent, year on year. A new, bilingual, Chinese section of the Immigration Service website is making it easier for visitors to lodge visa applications. While in China last week the Prime Minister announced that to make it easier for Chinese tourists to visit New Zealand, from 1 May this year the Government will extend multiple-entry visitor visas that are routinely granted to independent Chinese travellers to 24 months. He also announced a new 3-year multiple-entry business visa, which will lower the cost of travel for frequent business travellers and make it easier for them to move between the two countries.

Dr Jian Yang: What else is the Government doing to encourage growth in international tourism?

Hon STEVEN JOYCE: Today the Prime Minister announced that this year’s Budget will see significant investment in areas that encourage international growth. As part of this package, the Government will invest an additional $158 million over 4 years in tourism marketing and promotion. Achieving growth in tourism earnings requires targeted new investment to position New Zealand as a high-value destination in markets that have real potential for growth, like China. The Prime Minister will release exact details of the new investment later in the week. People to people links, whether they be as a result of tourism, education, cultural exchanges, or doing business, are crucial for building understanding and lifting economic cooperation between countries to create more jobs and growth in this country.

Solid Energy—Financial Position

8. Hon CLAYTON COSGROVE (Labour) to the Minister for State Owned Enterprises: What responsibility, if any, does he take for Solid Energy’s precarious financial position?

Hon TONY RYALL (Minister for State Owned Enterprises): Yes, as answered in the House on 28 February, I am the Minister responsible for exercising the powers of the shareholding Minister under the State-Owned Enterprises Act. The Act also lays out that the responsibility for the operational and financial performance of all State-owned enterprises, including Solid Energy, lies primarily with the boards of those companies, although shareholders and the Government are ultimately held accountable by the House and the public. I am not responsible for the significant commercial risks faced by Government-owned businesses, nor, in the case of Solid Energy, a 40 percent drop in world coal prices.

Hon Clayton Cosgrove: Why did he not appoint a Crown observer to the board of Solid Energy, given that Treasury advised him to do so in a briefing on 31 October, which said: “the presence of the Crown observer has an important signalling effect, continually reminding the company that its focus should be on moving to a sustainable position, and minimising risks to the Crown.”?

Hon TONY RYALL: Because at that time the Government had appointed a new chair, and we were also about to have new board members appointed to Solid Energy.

Hon Clayton Cosgrove: Does he stand by his statement to One News last night that “all state owned enterprises need to be able to publicly justify their spending”; if so, was the following

spending justified: $1.8 million on overseas travel, $1 million on nine communications staff, $500,000 on public relations and advertising, and $200,000 employing private investigators for security, when Solid Energy already had a security firm to secure its sites?

Hon TONY RYALL: I do believe that State-owned enterprises’ spending should be publicly justifiable, just as Solid Energy had to justify why it was spending taxpayers’ money on paying security people to spy on groups when Labour was the Government.

Hon Clayton Cosgrove: Has he questioned Solid Energy’s expenditure of $48,000 employing lobbyists Saunders Unsworth to advise on “select committee protocol” for a 1-hour appearance before the Commerce Committee; if not, does he consider it a good use of taxpayers’ money, when the company executives could not even adhere to the simple committee protocol of answering basic questions?

Hon TONY RYALL: I would have to say that spending $48,000, if it were solely for the purpose of appearing before the select committee, is an awful lot of money, but what I think it does demonstrate is that there is, for that member opposite, hope after politics.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. My question began with “Has he questioned Solid Energy’s expenditure …”. “Has he questioned it?” was the question.

Mr SPEAKER: OK, and if the member would like to ask that question again, I will listen carefully to the answer.

Hon Clayton Cosgrove: Thank you. There might be hope for the Minister as well.

Mr SPEAKER: Order! The member will simply ask his question again.

Hon Clayton Cosgrove: Has he questioned Solid Energy’s expenditure of $48,000 employing lobbyists Saunders Unsworth to advise on “select committee protocol” for a 1-hour appearance before the Commerce Committee; if not, does he consider it a good use of taxpayers’ money, when the company executives could not even adhere to the simple committee protocol of answering basic questions?

Hon TONY RYALL: Yes.

Hon Clayton Cosgrove: Why did the Minister take no action to rein in the extravagant expenditure of Solid Energy as the company’s financial position was rapidly deteriorating, given that he requested, and was receiving, month-to-month monitoring reports on the company, and if he believes he was right in taking no action, could he please advise the House why he bothers taking his ministerial salary and what exactly his role is as the guardian of the taxpayers’ purse in respect of State-owned enterprises?

Mr SPEAKER: There were a number of questions there; the Minister can answer any.

Hon TONY RYALL: Ministers took very significant action as a result of the declining position for Solid Energy, including putting the company on intensive monitoring. The chair has changed and the board has changed. What has not changed is the fact that this company had to deal with a collapse of 40 percent in the world coal price. Our Government did take action. It is a shame that that Government did not take action when it was allowing that company to spy on New Zealanders—

Mr SPEAKER: Order!

Christchurch, Recovery—Housing New Zealand Corporation Insurance Claim

9. NICKY WAGNER (National—Christchurch Central) to the Minister of Housing: How will the $320 million settlement of Housing New Zealand’s insurance claim for earthquake damaged properties help achieve the Government’s priority of rebuilding Christchurch?

Hon Dr NICK SMITH (Minister of Housing): The settlement is hugely helpful in that it enables the corporation to fast track repairs and replacements. Currently, each house has to be individually assessed and checked off with the insurer. It also restricts the ability to write off some of those seriously damaged homes and replace them. This settlement gives the Government the flexibility to rebuild for the future with the greater diversity of house sizes and to move away from

heavily concentrated State housing estates. The greatest benefit of this settlement is that it allows the repair programme to be completed in 3 years rather than in 5.

Nicky Wagner: What is the Minister’s response to the Opposition’s criticism that it is unfair for Housing New Zealand Corporation to have settled its claim ahead of some private homeowners’ claims in Christchurch?

Hon Dr NICK SMITH: The Government wants all earthquake insurance claims resolved for State agencies and for private building owners, and we want that done as quickly as possible, but it would be a nonsense for Housing New Zealand Corporation to sit back and to say that it is not going to settle its claims until every other insurance claim is resolved. The losers from that would be Christchurch’s most vulnerable families who depend on the corporation for their accommodation.

Nicky Wagner: Has the Minister seen the Opposition’s claims that this insurance settlement sets a double standard and that in the red zone Housing New Zealand Corporation has got a better deal than that of ordinary homeowners?

Hon Dr NICK SMITH: Well, that claim is quite wrong. For private homeowners, the Government has offered at the full 2007 valuation for homes and land that were insured and at half that for those that were uninsured. This is over and above the Earthquake Commission’s requirements by law, and the Government is, in fact, putting $1 billion on the table to assist with that. Housing New Zealand Corporation is not receiving any compensation for the 400 properties within the red zone for the loss of land value.

Government Communications Security Bureau—Process for Appointment of Director

10. GRANT ROBERTSON (Deputy Leader—Labour) to the Prime Minister: What role, if any, did he play in recommending the appointment of Ian Fletcher as Director of the Government Communications Security Bureau?

Rt Hon JOHN KEY (Prime Minister): As I have publicly stated before, I agreed with the State Services Commissioner’s advice that a potential short list of people identified by a recruitment consultant for the job should not be considered by an interview panel. I agreed with Iain Rennie to look elsewhere to fill the position. I rang Ian Fletcher and said that if he was interested in the position, he would need to go through a process and should call Maarten Wevers in the first instance. The interview panel was unanimous that Mr Fletcher was suitable for the position, and Mr Rennie then recommended his appointment to me. I took his appointment to Cabinet and it was agreed. I then recommended the appointment of Mr Fletcher to the Governor-General.

Grant Robertson: Why did the Prime Minister not give that information in his correction that he gave before the start of question time today?

Rt Hon JOHN KEY: Because it was not necessary.

Grant Robertson: Why did he not tell New Zealanders the truth about his role in the appointment process when he was asked direct questions about it in this House and by the media?

Rt Hon JOHN KEY: As I have said on numerous occasions, when the member asked me, it was a supplementary question to question No. 12., I was not expecting that particular question, and frankly the phone call was so unmemorable I had not remembered it. But I was the not the person who filled in my tax return—

Mr SPEAKER: Order! That adds nothing to the quality of the answer.

Grant Robertson: Why did he say 2 days after the question in the House “I didn’t undertake the recruitment, that was fully done by the State Services Commission …”, when he was the person who rejected the short list, he was the person who suggested Ian Fletcher, and he was the person who made a phone call to Ian Fletcher—2 days after the question was asked in the House?

Rt Hon JOHN KEY: Because in the context of the question I was asked I believed that to be correct. The recruitment was undertaken by the State Services Commissioner, and that is actually accurate in terms of the way it was done.

Louise Upston: Can the Prime Minister tell the House what reports he has seen of the Auditor- General’s view about the appointment of Ian Fletcher?

Rt Hon JOHN KEY: Funnily enough, I can. I have seen the Auditor-General say that he does not intend to carry out an inquiry into the appointment of Ian Fletcher. Let me quote from the Auditor-General: “The Prime Minister has responsibility for this appointment. Unlike for chief executives of other government departments, the relevant legislation”—

Mr SPEAKER: Order! [Interruption] Order! I have a point of order from the Rt Hon Winston Peters.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. With the greatest respect to the House and to the Auditor-General, if she has had a gender change, we should know about it.

Mr SPEAKER: Order! The Prime Minister has every right to answer the question that was put by Louise Upston, if he wishes to continue.

Rt Hon JOHN KEY: To continue: “The Prime Minister has responsibility for this appointment. Unlike for chief executives of government departments, the relevant legislation does not prescribe any particular process that has to be followed before making that appointment. … The State Services Commission provided support to the Prime Minister in this appointment process. … It is relatively common for recruitment processes to adapt as they progress …”. [Interruption] The members might not like it, but the Auditor-General says “No problems.”, the State Services Commissioner says “No problems.”, and, in fact, there is nothing wrong with the appointment. Ian Fletcher was the best candidate for the job.

Grant Robertson: How did he come to have Ian Fletcher’s phone number when he called him in July 2011?

Rt Hon JOHN KEY: No clue.

Mr SPEAKER: No. Order! It was a reasonable question, which I do not think should be difficult for the Prime Minister to answer. How did he come to have the phone number?

Rt Hon JOHN KEY: I genuinely have no clue. I do not know how I got the number.

Grant Robertson: In light of his last answer that he is clueless about—

Mr SPEAKER: Order! No, that will only lead to disorder. Would the member just ask his supplementary question. [Interruption] Order! If the member wants a supplementary question, he will ask it.

Dr Russel Norman: I raise a point of order, Mr Speaker. It is a perfectly reasonable question. The Prime Minister said he had no clue—

Mr SPEAKER: As to how he got a phone number.

Dr Russel Norman: Mr Robertson said he was clueless. That is the same thing.

Mr SPEAKER: No. Order! That is not a helpful comment from Dr Russel Norman. Would the member please ask his supplementary question.

Grant Robertson: Can the Prime Minister understand why New Zealanders are struggling to believe anything that he has got to say on this matter when he cannot even answer the question of how he came to have Ian Fletcher’s phone number?

Rt Hon JOHN KEY: No, because I did not, at that point, have Ian Fletcher’s mobile phone number. To the best of my knowledge, I actually rang the directory service to get the Queensland number. I do not actually have his number.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. Parliamentary question time will become a total waste of time if the Prime Minister can make it up as he goes along. He told the House that he happened to have Ian Fletcher’s number. Now he explains, weeks later, that he went and found it somewhere else; he did not have the number. What is the truth here? That is the purpose of question time.

Mr SPEAKER: Order! It is pretty clear to me that on reflection he had time to remember how he now recalls that he got the number. I do not think that is unreasonable at all. [Interruption] Order! The most important thing—

Rt Hon Winston Peters: It is not important whether it is strictly clear to you. What is important is that it is not clear to the rest of the country or anybody else in the House how you derived that understanding.

Mr SPEAKER: Well, the Prime Minister has now given an answer that has made it a lot clearer.

Grant Robertson: In light of the Prime Minister’s last answer, can he tell the House how he managed to get a mobile phone number from a directory service when you cannot get mobile phone numbers from directory services?

Rt Hon JOHN KEY: Because when I rang the Queensland service, it was redirected to that mobile.

Welfare Fraud—Information Sharing Between Government Agencies

11. MIKE SABIN (National—Northland) to the Associate Minister for Social Development: What early results can he report from the Government’s efforts to deal with welfare fraud?

Hon CHESTER BORROWS (Associate Minister for Social Development): Over the past week we have seen our new welfare fraud measures deliver their first results. Last Thursday the first inter-agency welfare fraud investigation resulted in the arrest of two people on charges related to a $375,000 welfare scam. [Interruption]

Mr SPEAKER: Order! [Interruption] Order! I am now having trouble hearing the answer because of the noise level coming from the Opposition side of the House. Would the Minister please start his answer again.

Hon CHESTER BORROWS: Over the past week we have seen our new welfare fraud measures deliver their first results. Last Thursday the first inter-agency welfare fraud investigation resulted in the arrest of two people on charges relating to a $375,000 welfare scam. This scam saw hundreds of beneficiaries making false claims for emergency dental and other assistance. The case was investigated by Ministry of Social Development fraud investigators working with the Police and the Inland Revenue Department, and it shows how agencies sharing their resources and information can help catch fraud that affects not just one but several Government agencies.

Mike Sabin: What success can he report from enhanced information sharing between the Ministry of Social Development and the Inland Revenue Department?

Hon CHESTER BORROWS: Improved information sharing is already paying big dividends, with 525 people who were working and no longer entitled to a benefit being identified and their benefit being cancelled. Although I am glad these people have found work, they have no right to abuse the welfare system and take money they are no longer entitled to. With the benefits already stopped costing $5.6 million a year, these results illustrate the potential for information sharing to prevent welfare fraud.

Mike Sabin: What can we expect to see next from his welfare fraud reforms?

Hon CHESTER BORROWS: Later this year the House will consider the Social Security (Fraud Measures and Debt Recovery) Amendment Bill, which will change the law to hold to account partners involved in relationship fraud. In the second half of the year our low-trust client measures will come into force, placing stringent new checks on beneficiaries who have previously tried to rip off the system, and we will continue to see offenders caught as a result of our interagency work and information sharing. For a tiny minority who think it is OK to steal from the welfare system, the time is up. If they do not come and put things right with us, we will be coming to them.

Oil, Gas, and Mineral Prospecting—Crown Minerals Amendment Bill

12. GARETH HUGHES (Green) to the Minister of Energy and Resources: Will he recommend returning the Crown Minerals Amendment Bill to the select committee so that the public can have a say on the so-called “Anadarko Amendment”; if not, why not?

Hon SIMON BRIDGES (Minister of Energy and Resources): As I told the member last week in question time, no. Supplementary Order Paper 205 was robustly debated in the House last week and voted on, and Green members, for example, took many calls in the Committee of the whole House and made their views very well known.

Gareth Hughes: Why, then, is the Minister rushing ahead to pass the so-called “Anadarko amendment” into law, given that a recent poll out today shows that 79 percent of New Zealanders and over 60 percent of National Party voters want the amendment to be withdrawn completely or at least sent back to a select committee hearing?

Hon SIMON BRIDGES: Well, I note that it was a Greenpeace poll, and what is very clear is that if you ask a certain question, mischaracterising the law, you get a certain answer. Actually, if it characterised the law correctly, I am sure it would find that the law is very popular among many New Zealanders.

Gareth Hughes: Are the Rt Hon Sir Geoffrey Palmer, Peter Williams QC, New Zealander of the Year Anne Salmond, and over 36,000 New Zealanders who have signed a petition in the last few days all unreasonable to be asking for public consultation on this amendment?

Hon SIMON BRIDGES: They are clearly wrong in their legal interpretation.

Gareth Hughes: I raise a point of order, Mr Speaker. I do not feel the question was addressed. The question was whether these New Zealanders are—

Mr SPEAKER: I think the question was very adequately addressed.

Brendan Horan: Given that a Horizon Research poll in the last week has found that 79 percent of New Zealanders oppose criminalising protest at sea, is he not ashamed that he is muzzling the people of Tauranga, who would make submissions if the select committee process went ahead?

Hon SIMON BRIDGES: As I have made very clear, this HorizonPoll was commissioned by Greenpeace. It asked a certain question; it got a certain answer.

Gareth Hughes: Can he guarantee that we will not see a Gulf of Mexico - sized oil spill in New Zealand; if not, is it not deep-sea oil drilling rather than peaceful protest the dangerous and reckless activity he should be stopping?

Hon SIMON BRIDGES: If the member was right, perhaps he could have focused on that in some of his speeches instead of the sideshows the Green Party members did focus on. The reality is we have very robust processes—

Hon Member: Just answer the question.

Hon SIMON BRIDGES: Well, I am answering his question. If he would sit down—

Gareth Hughes: I raise a point of order, Mr Speaker. I think that was entirely unfair of the Minister to start off with an attack. He did not attempt to address the question whatsoever.

Mr SPEAKER: Order! The Minister is moving to it. The question was whether he can guarantee, etc. The Minister should answer the question.

Hon SIMON BRIDGES: There are very robust processes and regulations coming through this bill, in fact, that make me very confident that we will not see that sort of disaster.

Question No. 10 to Minister

Rt Hon JOHN KEY (Prime Minister): I seek leave to ensure that there is absolutely correct information and to make sure I give an answer to Mr Robertson.

Mr SPEAKER: What is the point of order?

Rt Hon JOHN KEY (Prime Minister): I am seeking leave to make sure I give you the fullness of the answer.

Mr SPEAKER: Are you seeking leave to correct an answer? [Interruption] I am not sure what the point of order is.

Rt Hon JOHN KEY (Prime Minister): I am seeking leave to complete the answer, for fullness.

Mr SPEAKER: Leave would need to be required. Leave is so denied. [Interruption] Order! I have a point of order and it will be heard in silence.

Question No. 3 to Minister

Rt Hon WINSTON PETERS (Leader—NZ First): I raise a point of order, Mr Speaker. If you check the Hansard I believe that what you ruled earlier today on question No. 3 is incorrect. We asked a primary question and four supplementary questions, one of which was a repeat of the right to ask one of those supplementary questions again. I think you have got your count wrong.

Mr SPEAKER: I will certainly check the Hansard and have a look at that for the right honourable member. Supplementary questions are, of course, always at the discretion of the Speaker. If a mistake has been made, I will certainly make sure we find a way to correct it.

Question No. 10 to Minister

Hon TREVOR MALLARD (Labour—Hutt South): I raise a point of order, Mr Speaker. I want to make it clear that if the Prime Minister seeks leave to make a personal explanation to correct an answer that was incorrect, the Labour Party will not oppose it.

Mr SPEAKER: That is the only way forward. If the Prime Minister feels that his answer was incorrect because it was incomplete, he has every ability to seek leave to make a personal explanation.

Question No. 10 to Minister—Amended Answer

Rt Hon JOHN KEY (Prime Minister): I seek leave to correct that.

Mr SPEAKER: The member so seeks leave. Is there any objection? There is none.

Rt Hon JOHN KEY (Prime Minister): I have now checked with my office. We cannot be 100 percent sure whether I rang the directory service or my assistant rang the directory service—either is possible. Either the call was redirected or the number was given. We are fairly sure that it was redirected. That is the fullness of the answer.

ENDS

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